Welcome to a special edition of Digital Insight. Mike Bank an Angel investor covers one of the most rewarding aspects of the entrepreneur’s life that few get to experience: The Exit. Mike meets Omkar Joshi who last week sold his business to the market leader in his sector of Financial Reporting.
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video link to Q1) Omkar why don’t you tell us a bit about Company Reporting
video link to Q2) And you were recently bought out by Wolters Kluwer?
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Mike Bank: “Hello and welcome to a very special episode of Digital insight. We’re here in sunny Kingston outside the offices of Wolters Kluwer to interview an interesting entrepreneur. Please come and follow me inside.
Hello and welcome to the latest edition of Digital Insight. My name’s Mike Bank and I’m here with Omkar Joshi from Company Reporting. Omkar why don’t you tell us a bit about Company Reporting.”
Omkar Joshi: “Sure, thank you and thanks for having me on Digital Insight. Really appreciate the opportunity. Company Reporting is a niche research company. We cover annual reports of public companies. Understanding trends and techniques in financial reporting. It’s a very niche market. As far as we know no one else does it, and we’re leaders in this field of trends and techniques in financial reporting. It’s a business that has been founded some time back. The brand itself ‘Company Reporting’, but obviously in the last 3 or 4 years we’ve made some serious progress there.”
Mike: “And you were recently bought out by Wolters Kluwer”
Omkar “That’s right, yes last week we finally accepted the offer of Wolters Kluwer to completely buy out the business. So an acquisition. It was after a series of discussions over the last year or so ago which started with partnership discussions and we eventually accepted to be acquired by the company”.
Mike “Let’s take it a step back. Maybe you can tell us a bit more about what you were doing before you started with Company Reporting.”
Omkar “My background is I’m not a typical entrepreneur. I’m sure several of your audience of entrepreneurs are first time entrepreneurs who are doing stuff when they are young. Creating new products. A lot of developers. I’m not that stereotype, I’m a slightly older entrepreneur. I had a very cushy job in Thomson Reuters which is actually a competitor now. I used to be part of the strategy function in the innovation department working with divisions within the company to create new products and take them to market.”
Mike “So it was quite a big jump then to go off and set up on your own. What led you to doing that?”
Omkar “It was all my life passion to start doing that. For all my sins I’m actually a qualified chartered accountant. One of the things that my father used to say when I was studying for my accountancy was ‘hopefully at some stage of your life you might jump and set up your own practice.’ And that was as cool as setting up a new business for me for him at that point. But at Thomson Reuters I was in a very comfortable job. I was doing a lot of board level presentations.
At that point I felt that I needed to make this choice and really give it a shot. I was 30 then and I said if I don’t try this now it’s never going to happen. So I might as well give it a shot. Give it a crack and if things go to plan in a few years I’ll be sitting on a reasonably good business. If they don’t go to plan I’ve got enough qualifications to actually find a job and support my growing family.”
Mike: “So you had security to an extent, you had the comfort but you wanted to do more.”
Omkar:”Yeah, it was a very secure job, absolutely and this was a point in 2007, 2008 actually before Lehman Brothers went bust and the whole debit bubble burst. So yes the job was secure, I had just finished an MBA as well. Prospects within Thomson Reuters were quite bright for me.”
Mike: “So in terms of actually taking that step and making the jump away from the corporate world, what sort of work did you do beforehand to maybe test the market to see if there was a demand for your product?”
Omkar:”We used to look at quite a few new opportunities, new markets and Thomson Reuters being a very global organisation the view was always across the world what’s happening. Let’s look at parallel markets how they function. Because of my background I always had an interest in tax and accounting. So accounting is my primary focus, before being part of strategy I was part of the core accounting function. So I had a good view of how the market was. What sort of customer needs existed. So I knew there were some very specific niche areas that weren’t being covered by some of the largest publishers.
That’s where I recognised the opportunity and I was able to part ways with Thomson Reuters on amicable terms so that I could do something of my own. It was a difficult decision with the security I had, but at the same time I was motivated to do this at that point.”
Mike: “Let’s talk about your early days in that case. The challenges you faced maybe coming up to your first sale. How did you go about that?”
Omkar: “This is a very interesting question. Like I said I’m not a stereotype entrepreneur so I didn’t actually create a product myself. So I had ideas in my mind. I worked with a number of developers, designers. Actually a couple from the very popular Open Coffee Club. The London premier on-line mailing list. Actually it’s meant to be a physical networking event as well. I got a couple of developers to build a prototype for me and that was really the start of Company Reporting that it is now today.
Also part of your question before was did we look at the market and what sort of studies did we do. That was my core expertise was really to understand what the market wants. I’m not a developer so I’m not able to build a product but I was able to build screens. I was able to build prototypes in Powerpoint and draw by hand and to actually create the kind of customer experience that I felt would really work with some of the customers.
And then I actually took that extra step. I met several customers, potential customers, partners and the likes and showed them the prototypes. How it would actually function, what are the things we can add and how it is going to help our customers do their research. The kind of response I got at that point was ‘Wow ! This is excellent. You’ve got to do this. There’s nothing like it that exists in the market. Go for it and do it”
Mike: “So it sounds to me that you knew exactly where your core skills lay. You worked to build a team around you to fill gaps basically. I guess my next question is ‘How is this funded? Were you looking for outside funding from Angels or VCs or Incubators or Accelerators?”
Omkar: “Great stories about me going on rainy days and standing outside VC offices to be there on time. We almost got to a term sheet stage with a prolific Silicon Valley VC. Actually it so happens that this market in the US because what’s known as USGAAP which is a very complex set of rules. So the market is quite well developed in the US but on the other side of the pond in Europe it’s not quite there yet. So some the US VCs actually understood the value we were trying to create.
We almost got to a term sheet stage. But this was right the week before the Lehman Brothers episode. At that point they just pulled the rug out of under all their forthcoming investments. The whole thing fell off a cliff. So at that point I chose to try out incubators: Seedcamp, AngelPad, all the likes. Their was an e100 at LBS. An Angel network. I tried quite a few angel investors, I tried quite a few early stage funding bodies and I just found it really tough going . Seedcamp rejected my application on a number of occasions ..”
Mike: “Despite being a mentor for Seedcamp”
Omkar: Yes, I have tremendous respect for Seedcamp. They obviously have some real superstar companies and I guess my pitch wasn’t perfect. Or the opportunity was not clear enough. So the bottom line is I did not get funding at that stage. I kept on building the product, bootstrapped a little bit of it and kept showing it to people to see if it is working or not.”
Mike: ” So it sounds like you had not necessarily setbacks because you had the knowledge, you had the team around you to help you develop the product and of course you’ve got the customers who had almost given you the reason to build the product in the first place. But you did suffer some challenges one of which you mentioned was the funding side of things. I wonder if you could share with us some of the other challenges you faced in the early days.”
Omkar: “One of the biggest issues I have is that the product is that is a very niche research tool and several of the funding bodies, or VCs, investors or even potential customers and suppliers didn’t actually understand the product. A big shift for me was from selling the product to explaining to people what what it is that we are actually doing. Then we also suffered from the bias of a typical market perception of B2B businesses which we referred to as ‘unsexy’ on several occasions. Its the fact that B2B doesn’t really appeal to most people around. And this is a core B2B business.
We are absolutely selling to large public companies and accounting firms. So its a complete B2B business and the real problem is people just don’t see eye-to-eye if you say ‘we are B2B.’ Everybody out there is looking for the next Facebook, the next Twitter or LinkedIn and actually they don’t exist do they. Because if they did they would be out there already.
So that was one of the key challenges. Whether its speaking to potential customers, investors you know even employees are keen to work for a sexy startup and developers for example. So I used to find quite a few developers who would do stuff for me on a paid basis but not necessarily those would want to come and join hands. Because it wasn’t really the kind of opportunity they want to be looking for.”
Mike: “That’s a big problem I think many startups face across the board. even the sexier startups for want of a better word.”
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